I have been lamenting in recent weeks that market interventions by the POTUS render our cycle-based swing trade picking screens ineffective, if not useless, and I have been thinking out discontinuing them. But April has gotten off to a booming start, reversing much of the March losses.
Don’t be fooled. This is the nature of randomness.
The market enters a pivotal week where bullish cycle structures at the short and intermediate levels must contend with intensifying geopolitical pressure. Whether the S&P 500 can clear immediate resistance to reach targets near xxxx will determine if technical cycle phases can override external fundamental shocks.
The US Treasury is effectively acting as a massive money printer, but the transmission belt connecting debt issuance to stock market gains is beginning to slip. While seasonal tax revenue provides a temporary liquidity “firehose,” structural regime changes in the Treasury and repo markets suggest a long-term bear market is looming, once seasonal Treasury bill paydowns generated by the March-April tax windfall, subside in late May.
The market broke its downtrend last week but established a new intermediate downtrend channel, with cycle alignments suggesting an intermediate low forming here. However, failure to mount a significant rally from current levels or a breakdown of key support could still trigger a crash.
Current results are terrible, in fact the worst month since beginning this exercise 9 years ago, and especially since tweaking the algorithms in November 2024.
Cycles are in gear to the downside, except for the 4 week cycle, which has extended beyond its ideal bottom window. The 6-7 week cycle projection of xxxx is an outlier for now, but if projected channel support around xxxx breaks, this could turn into a steep, fast decline to much lower levels. The next support area is around xxxx.
Federal tax data tells a story the BLS doesn’t: employment growth is stalling, corporate profits are getting squeezed by tariffs, and a ballooning deficit shows no sign of moderating — with war costs making it worse. That can mean only one thing.
The list currently has an average loss of -4.3% on an average holding period of 20 calendar days. This is an improvement over last week’s 7.2% loss thanks to strong performance of open picks, which have an average gain of 4.6% over 20 calendar days. But it comes after weeks of disastrous model output, and my selections. I question whether the model can provide reliable output, in a market that has more government interventions than possibly ever.
The S&P 500 remains confined within a narrow downtrend channel, with indicators signaling major trend weakness. While a news-driven rally is under way this morning, if the index fails to sustain gains and if key support levels fail to hold this week, this would be a potential crash setup.
Cycles are in gear to the downside, except for the 4 week cycle, which has extended beyond its ideal bottom window. The 6-7 week cycle projection of xxxx is an outlier for now, but if projected channel support around xxxx breaks, this could turn into a steep, fast decline to much lower levels. The next support area is around xxxx.
The tide that floated all boats for three years is receding. The perpetual motion machine that debt built is running in reverse. The Treasury basis trade that quietly financed the federal deficit while fueling a three-year equity bull market began unwinding in September 2025, and the liquidity architecture it supported — repo, foreign central bank demand, and speculative equity commitment — is now deteriorating simultaneously, with no replacement buyer in sight.
The S&P 500 remains confined within a narrow downtrend channel, with indicators signaling major trend weakness. While a news-driven rally is under way this morning, if the index fails to sustain gains and if key support levels fail to hold this week, this would be a potential crash setup.
Lee Adler